Inward investment programmes deliver ‘next to nothing’ for Wales

THE Welsh Government has spent more than £100m a year on inward investment programmes which have delivered “next to nothing”, the former head of the scrapped Welsh Development Agency told MPs yesterday.

THE Welsh Government has spent more than £100m a year on inward investment programmes which have delivered “next to nothing”, the former head of the scrapped Welsh Development Agency told MPs yesterday.

Sir Roger Jones is calling for the creation of a “smaller, more focused and independent body” which would be controlled by a private sector board with strong trade union representation.

In 2009 only 3% of foreign direct investment projects were based in Wales, down from 9% in 2003. Sir Roger said the decision to bring the WDA into the civil service in 2006 was due to “political expediency” and “a rivalry amongst political leaders as to who could best deliver the bonfire of the quangos”.

He told the Welsh Affairs Committee in his written evidence: “Despite being probably the best known and most effective industrial development agency in Europe, the Welsh Government saw fit to disband the WDA in 2006, and transfer its function to the civil service in Wales. My pleadings at the time went unheeded. I stated publicly that it would take three more years to implement change.

“This would sentence Wales to nearly 10 years in the wilderness in terms of industrial development. To this day, I stand by my prediction.

“We have seen expenditure in excess of £100m per annum that has produced next to nothing in the form of outcomes.”

Describing the consequences of putting ministers and civil servants at the forefront of the search for inward investment, he said: “The single factor which differentiates the public and private sectors is the propensity to take risks. The public sector is risk averse, as is the majority of its hierarchy.

“A profit is nothing more than a reward for taking a risk. If the system demands a completeness of information prior to a decision, it will probably take too long and the opportunity will have passed.

“The WDA was successful because it insulated politicians and civil servants from risk. In the post-WDA era, it became evident that the management controls which were applied made the interface with the wealth creators dysfunctional.”

Sir Roger said the present situation cannot continue and argued a body with an annual expenditure of £50m, to include £10m of initial marketing spend, could deliver real results.

He said: “Trapped with GDP per capita at around 75% of UK average, the status quo is not acceptable. Some kind of arm’s length agency is essential if industrial development is to be achieved.

“This has to be in position by the time the economy starts to recover.”

A Welsh Government spokeswoman said: “We don’t recognise these comments. The reasons for merging the WDA with the Welsh Government are well documented and are based around transparency, delivery and accountability.”

Sir Roger said at least £50m had been spent establishing the WDA brand.

He said: “I would argue that belonged to the people of Wales and not to some people in the Assembly building.”

He also blamed “political correctness” in Cardiff Bay for not developing recreational shooting in Wales.

He said: “The value of shooting is about £80m. That could be doubled ever so easily.”

Glenn Massey, who conducted a hard-hitting review of the Welsh Government’s overseas trade activities through its erstwhile International Business Wales (IBW) brand, said he did not think people with the right skills to exploit commercial opportunities had been hired.

He said: “If you can earn £100,000-£150,000 working in London, what are you going to do? Why would you want to go and work as a civil servant in Cardiff?”

Mr Massey claimed that “frankly and sadly” Wales is not a well-known brand in many parts of the world.

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